Jobs have been slashed. Circulation is plummeting. Coverage of some topics--and even entire communities--has disappeared.

"Nearly half of the reporters in the [San Francisco] Bay Area over the last decade have lost their jobs," says Neil Henry, dean of the Graduate School of Journalism at the University of California, Berkeley. "This is a crisis of epic proportions. It's also a tragedy. It's also a very, very exciting time."

"Exciting" may seem like an unusual word choice for an area that has seen so much carnage in the media landscape in the past year. The San Francisco Chronicle has cut more than 150 jobs, and MediaNews Group--which owns the San Jose Mercury News and about a dozen other papers in the Bay Area-has cut dozens of jobs and recently announced it will cut pay by an average of 5 percent. But instead of simply bemoaning the cuts, a broadcaster, a journalism school and a businessman are hoping something positive can come out of the devastation.

KQED Public Media and Berkeley's J-School--with financial help from San Francisco businessman and philanthropist Warren Hellman--have teamed up to launch a new nonprofit online news organization they say will fill the holes in Bay Area coverage.

The site, temporarily dubbed the Bay Area News Project, will focus on local news, says Scott Walton, a spokesman for KQED. "We're not here to create a national or international news site," he says, but rather one focused close to home with coverage of civic affairs, the arts, community events and areas not covered adequately by other media outlets.

"Our members have come to us and asked us to focus more on local news, because it's been disappearing from the paper," he says of KQED, which includes a public television station and the most-listened-to public radio station in the nation.

And, backers say, the time is right for trying something new.

In February, Hearst threatened to sell or close the Chronicle, which lost more than $50 million in 2008, if it could not find ways to cut costs dramatically. Carl Hall, local representative for the California Media Workers Guild and a 22-year veteran of the Chronicle, was on the committee that led negotiations with the company at the time. The Guild eventually agreed to concessions, and the paper stayed open. But Hall says he knew something had to change.

"We determined that we could not just sit there passively and wait for the next round of negotiations," he says. "We felt like, the community and the Guild, we had to do something more creative than just sit around." So he arranged for a meeting with Warren Hellman and others to talk about a possible solution.

In March, Hellman, cofounder of the private equity firm Hellman & Friedman, announced that he and other business leaders were working on a plan to turn the Chronicle into a nonprofit. That plan went nowhere, but the idea of a nonprofit news operation had entered the conversation.

Around the same time, Henry gave a presentation to Hellman and others about Berkeley's efforts to provide multimedia coverage of media-neglected communities in the Bay Area, Henry says. Thanks to a $500,000 grant from the Ford Foundation, the school renovated its curriculum and developed hyperlocal Web sites for the Mission District of San Francisco, North Oakland and the city of Richmond, among other locales.

Those discussions led to the idea of an independent nonprofit to provide original local coverage. "The scope of the journalism being done by these newspapers is just not what it used to be. And it's not where it should be," Hall says. "We determined, after a lot of study, that what we needed to do was fill the gap created by all these layoffs."

The Hellman Family Foundation will provide $5 million in seed money for the project, but there is "considerably more fundraising to do," Henry says. The organization will seek tax-exempt 501(c)3 status and be supported mainly by public donations, according to the project's Web site, bayareanewsproject.org.

Many details have yet to be worked out. Job descriptions are posted on the site for an executive editor and chief executive officer, and organizers hope to have the top editor on board by early December, Walton says. Details like how many reporters and editors the organization will employ will not be decided until the editor starts work, but the partners are aiming for a spring launch, he says. KQED will provide "support establishing guidelines and principles," Walton says, as well as expertise as an established nonprofit supported by member/donors.

The new news outlet will distribute its content through multiple channels, primarily online and mobile, according to its Web site. The organization has been in talks with the New York Times, which recently launched a Bay Area section, but a Times spokeswoman would not provide specifics about what may result from those talks. "We're having in-depth conversations with the Bay Area News Project, and the conversations have been fruitful," Diane McNulty says.

Although the Guild played a role in getting the venture started, Hall says it will be up to the employees whether the organization will have a Guild unit. "We have no formal role," he says. "We did this because we feel like we need to be creative and take a risk. We can't just sit around and feel sorry for ourselves...or beat your head against the wall."

When the project was announced, critics derided the idea of using student journalists as free labor at a time when so many journalists are losing their jobs. But Walton, Hall and Henry say the criticism is misguided. "We got some heat from some people in the Guild who think this could make their existing job even more shaky. I respect that point of view, but I reject the argument," Hall says. "This should create some jobs."

When Henry heard about the project, he says, he saw it as a "natural evolution of our program." "I don't have much patience for criticism that our students are being used for slave labor," he says, not only because it isn't true, but also because job opportunities for recent graduates in that area are virtually nonexistent. "This is the brightest prospect that I can see on our horizon," he said.

Henry says he anticipates stipends, fellowships and internships for students who participate. "I envision this as an independent newsroom with [professional] writers and editors," funded by public and private donations as well as memberships, sponsorships and advertising, he says. He hopes to see new-media training available for journalists, opportunities for journalists to teach and work with the graduate students and more opportunities for students to publish their work. But many of the specifics will depend on funding. "With the right kind of support, I think anything is possible," Henry says.

Walton says students will participate, although in what way hasn't been decided. But one thing is certain: The chief reporters will be full-time, paid, professional journalists. "There's student involvement at other news organizations, called internships," he says.

Hall says graduate students will add an important element to the project. "They're already doing hyperlocal sites in the East Bay and Mission District," he says. "We don't want free labor replacing good jobs, but these students could be a terrific asset to the newsroom we're talking about here. They're not going to be exploited, they're going to be respected."

Hall says he hopes the project will help place extra emphasis on quality in all area media. "I hope the impact is positive, not just in terms of the jobs we create at this new thing," he says, but also in helping to persuade other news outlets to stop "destructive" layoffs and protect the quality of their news products. "We need to fight in new ways. And in the Bay Area, the way we're fighting is by sitting down with people like Warren Hellman and investment bankers and nonprofit lawyers... We have to be creative. We have to invent a new structure and a new model to set the foundation for what we really want to do, which is journalism."

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